Q: Hi Team,
Can you comment on this company? I'm not sure why it gets such little respect
Can you comment on this company? I'm not sure why it gets such little respect
5i Research Answer:
It is quite a small Canadian company that does the majority of its business in China. These two factors right away can keep investors at bay. Estimates have been falling and it misses earnings estimates last quarter. The sector has struggled, and many companies are heavily-reliant on government subsidies, which can be turned on and off. Insiders are still committed with 21% ownership, but the stock is still down 75% since 2021 despite fairly consistent and robust sales growth. It is cheap but does have $2B in debt (net) and $1B in preferred share obligations, fairly high against $684M in cash flow last year. Also, free cash flow was negative in 2023.